Taiwan now is in a strange position. It is effectively an independent country, with its own government, state administration, diplomatic corps, army, flag, and so on. And in many respects, it has been a very successful country. Its economy has performed well over a long period of time, and the fruits of economic growth have been dished out in a relatively egalitarian manner. It has also managed an effective transition from KMT one party rule to a multi-party democratic system in which opposition candidates have been able to win elections and take office. For all that, very few other countries recognise its sovereignty, mainly because it is impossible to retain formal diplomatic relations which China and Taiwan simultanaeously. Its security is underwritten by the USA, but even the USA does not recognise it as a state. The countries that maintain diplomatic relations with it are mostly Central American states. I suspect that the USA leans on them to do this, as a way of giving Taiwanese diplomats someone to play with. Unfortunately for the island's rulers, the rising importance of China proper in world affairs has meant that many of these countries are thinking about transferring their diplomatic recognition to Beijing. It is quite possible, therefore, that Taiwan will have no formal diplomatic recognition in years to come.
My expectation is that Taiwan will nevertheless continue to exist as a de facto country. One could imagine a scenario in which Beijing decides to forcibly resolve the issue, at a time when the USA has given up on supporting its erstwhile unrecognised
friend. However, my reading of the balance of military forces is that China would not be able to land an invasion force on the island, and that any attempt to do so would be a costly and humiliating failure. In any case, economic links between the island and mainland are now so strong that a war between them would be patent folly. The continuance of "Panda Diplomacy" between the island and mainland suggests that relations while continue to be relatively cordial.One possible utopian future outcome would be that if China ever starts to seriously democratise, then Taiwan might be able to mount a reverse takeover of the mainland. Taiwan's experience of democratising while retaining social stability could prove useful to China, and the KMT's continued importance after the transition on Taiwan would be reassuring to people within the CCP who fear that democracy could lead to their extinction.
Taiwan flag from Wikipedia
